Thursday, March 8, 2012

There is a big difference between 95% and 85%

This could be a major blunder for CNBC. They were relying on Reuters for this story.

"About an hour before the deadline expired, the participation rate was nearing 95 percent and responses were still coming in," a Greek government official told Reuters.

But it seems that story is inaccurate. This Bloomberg story was published at about the same time.

While Greece would prefer a voluntary deal, the government has said it will use so-called collective action clauses to force holders of Greek-law bonds into the swap if the private sector involvement fell short and it got approval from investors to change the bonds’ terms.
The Greek government had said it wanted participation above 90 percent and was seeking a minimum level of 75 percent. Greece expected holders to accept the offer and was ready to force them if necessary, Venizelos said in an interview earlier this week.

Reuters also flashed the 85% number on their site but there is no story that CNBC quoted. The difference between these two numbers may impact the decision by the Greek government to enforce CACs.

Update: CNBC made some "adjustments" to their article.

CNBC - new language: The official said the figure referred to the voluntary take-up of the offer, however another official said it assumed the activation of collective action clauses (CAC) that would impose the deal on all creditors holding Greek law bonds.

The 95% isn't the voluntary exchange percentage number, which is what the Greeks were supposed to report on Thursday evening. Instead it represents the percentage of bonds to be exchanged after CACs are enforced next week.

That is a fine piece of journalism for which CNBC gets the Sober Look Hype Award. Congratulations.